Almost every province’s housing market saw a cool start to the year, as the effects of a new mortgage stress test took their toll on sales and prices. But according to a new report, one province seems to have dodged the slowdown.
“Sales of existing properties in several provinces nosedived in January and February, especially in Ontario, while sales in Quebec merely dipped,” write Desjardins vice-president and chief economist Francois Dupuis and senior economist Helene Begin, in a recent report.
While sales in Quebec were slightly down month-over-month in January and February, the province fared much better than Ontario, Alberta and BC. In fact, the number of January property transactions reached a 10-year high, and sales remain historically high this month, while supply continues to fall.
The rise in sales and prices can largely be attributed to Montreal, which is seeing a particularly strong condo market so far this year.
The above chart demonstrates how condo sales have shot up in the province over the last year, while sales of single-family homes have remained steady.
“Strong demand for condos in the Montreal metropolitan area has wiped out the surpluses seen in recent years,” write Dupuis and Begin.
The increased demand has sent supply levels plummeting, which could drive prices up in the coming months.
“The level of sales is still historically high while the number of homes for sale continues to dwindle,” writes the pair. “A shortage in the single-family market in the Montreal region due to an insufficient number of properties for sale relative to demand is putting pressure on prices.”
This isn’t the first time industry commentators have pegged Montreal as a housing market to watch.
“The strength of the market is built on incredibly strong fundamentals,” Quebec Federation of Real Estate Boards market analysis department manager Paul Cardinal told BuzzBuzzNews.
Montreal’s employment market has created a whopping 105,000 jobs in the last two years, while unemployment remains low and consumer confidence sits at a 15-year high.
According to Cardinal, these numbers are just beginning of what should prove to be one of the strongest years for the Quebec housing market in the past decade. And main the reason that the province has managed to dodge the effects of a new mortgage stress test? Cardinal says the market’s affordability doesn’t hurt.
“Because Quebec homes are at a lower price point, it won’t have as much of an impact on buyers in this area, compared to Ontario or BC,” he says.